Oil sands will be Canada’s economic engine for next 25 to 30 years: Deloitte

Deloitte: Oil sands to be Canada's economic engine for 25 to 30 years

Canada’s oil sands are key to the country’s prosperity and for it to grow, the industry needs more pipelines, more collaboration, and dialogue that does not fuel “a climate of antagonism,” said a report by Deloitte Canada.

There was dissent back then about spending all that money on the railway, but now we ask how could you not have done that. It is the same with the oil sands

“Proponents of development argue in favour of the economic benefits while opponents argue those benefits aren’t worth the environmental risk,” said the report, entitled Gaining Ground in the Sands 2013. “From our perspective, growth of oil sands is key to continued growth in Canadian prosperity.

“The constructive argument is really over how to develop the oil sands…not whether or not to develop them at all.”

Over the next few decades, the Canadian Energy Research Institute estimates a boon of $2.1 trillion in economic benefits over the next 25 years and about 905,000 jobs by 2035.

“The oil sands are going to be the economic engine for the country for the foreseeable future, for the next 25 to 30 years, and it is akin to the impact of building the national railway in the 1880s,” Marc Joiner, a partner at Deloitte in Toronto, told the Edmonton Journal. “There was dissent back then about spending all that money on the railway, but now we ask how could you not have done that. It is the same with the oilsands.

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Citing figures from the Energy Resources Conservation Board, the report estimates that by 2021, the oil sands will have ramped up production from 1.7 million barrels per day to 3.7 million. However, new oil may have no where to go: the industry will hit pipeline capacity by about 2017 if developing projects are not completed, the report said.

Given the ongoing gibberish coming from the mouths of elected politicians, ordinary Canadians can hardly be blamed if they don’t appreciate the crucial importance of the energy industry to future prosperity.

Alberta’s crude oil is already sold at a discount to the U.S. because of our limited pipeline capacity; at a discounted average of $19 per barrel (August), the industry loses about $27 million a day. This loss would be lessened with the development of the Keystone XL pipeline which proposes to transport Alberta oil sands crude to Gulf Coast refineries, the report said.

The energy industry generated almost $22 billion last year which provides support for the country’s social programs, the report added, quoting the Asia Pacific Foundation.

The report detailed 10 trends and obstacles facing the industry; discussion points included a call for increased productivity and a national energy strategy. “Discussion today of implementing a ‘national energy strategy’ is not a repeat of the Trudeau-era National Energy Program, nor should it be,” it said. “It would almost certainly require resolution of the evident uncertainty of whether we are trying to be (or even want to be) a ‘superpower’ or possibly a ‘superstore.’”

“We are trying to be an instigator for discussion with this report, which has gone to industry and governments,” Mr. Joiner said. “But I think the oil sands firms will have to be the proponents of change and invest in this dialogue with politicians.”